However, yesterday’s daily candlestick closed as a Doji which indicates indecision. Is this a first sign of a reversal? Let’s review.
Price Charts and Technical Analysis
The ETH/USD uptrend seems too strong for a reversal to take place now:
- The gaps between the moving averages (MAs), the angle of the MAs, and the gap between price and the 21 EMAs all indicate a strong uptrend.
- The Doji daily candlestick indicates indecision and it is more likely to create a potential sideways pullback (grey arrow) or retracement (orange arrow) in the uptrend.
- The support zone (blue box) is likely a bouncing spot (blue box) for more upside (green arrows).
- Only a deeper retracement places the bullish outlook on hold (orange) or invalidates it (red circle).
On the 4 hour chart, price action made a bearish pullback to and bounce at the 23.6% Fibonacci retracement level:
- After completing a 5 wave pattern (blue) in wave 3 (orange), price action is probably building a wave 4 pullback (orange).
- The 23.6% and 38.2% Fibonacci retracement levels remain key for the potential wave 4 (orange) pattern.
- A bull flag pattern (grey arrows) could indicate a shallow pullback and uptrend continuation (blue arrow).
- A deeper pullback (orange arrows) will probably test the Fibonacci support levels.
- The targets of the uptrend are located at $4750, $5000, $5500.
- A break below the 50% Fib places the uptrend on hold (yellow button) whereas a deeper retracement invalidates it (red button).
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